Apple is working on a cheap iPhone

Apple customers who like the iPhone X’s facial recognition and edge-to-edge screen but were turned off by the $999 price tag may have additional options at lower prices this fall. Apple is working on a lower-cost iPhone with some of the iPhone X’s best features for a launch later this year, according to Ming-Chi Kuo. The lower-cost iPhone will have the same facial recognition sensor as the iPhone X, as well as an edge-to-edge 6.1-inch LCD screen and no home button. Kuo predicted in a January 23 note it could cost between $700 and $800 — significantly less than the iPhone X, but higher than the current iPhone 8 models. However, KGI Securities says to expect some tradeoffs with the lower-cost iPhone, like the possible inclusion of a single-lens rear camera to save costs. KGI Securities believes it will have an LCD screen, which is an older technology than the OLED screen found in the iPhone X. And Kuo predicts it will have an aluminum casing, which is less premium than the stainless steel on the iPhone X. But the lower price may end up making the new iPhone the best-selling model, with over half of new lineup shipments, KGI Securities predicts.

The low-cost device isn’t the only new iPhone KGI Securities predicts Apple will launch. Apple could be preparing a new version of the iPhone X with better components in the same 5.8-inch sized-body. And there could be a so-called “Plus” version of the iPhone X launched this fall with a massive 6.5-inch OLED screen. Apple typically launches new iPhones in September. The KGI Securities research, which hasn’t been confirmed by Apple, suggests that the company may try to pull a trick that it last tried in 2013. In 2013, Apple tried to introduce a new-lower cost iPhone, called the iPhone 5C, instead of selling the previous year’s model at a discounted price. It was a sales disaster. Apple CEO Tim Cook even admitted that the device sold more poorly than the company expected. Demand for the colorful iPhone “turned out to be different than we thought,” Cook said in 2014.

It seems that Apple may try the iPhone 5C gambit again. KGI Securities predicts that Apple may discontinue the current iPhone X model, instead of selling it at a lower price after the new iPhones come out. The new lower-cost iPhone could help Apple gain market share in China, according to the research, which was also the goal for the iPhone 5C. “Lowering iPhone X’s price after the … new models launch would be a negative to product brand value given 3D sensing and OLED display are features of the new high-price model,” Kuo wrote in a January 22 note. Nikkei reported over the weekend that Apple was slashing iPhone production earlier this week. KGI Securities earlier this month revised its estimate for total iPhone X shipments over its lifetime to 62 million, down from 80 million, in a January 18 research note and said that shipments were “lower-than-expected.” If Apple were to discontinue the iPhone X this year, the lineup this Christmas could look a little bit like this: iPhone “X2 Plus” — Price unknown / iPhone “X2” — $999 and up / iPhone X — discontinued / LCD iPhone with Face ID — $700 to $800 / iPhone 8 or iPhone 8 Plus — $599 or $699 / iPhone SE — $350